While Groupon is not what you could consider mobile and location based in strict terms they still provide local services and from distribution perspective the affiliate move by Groupon (e.g. http://techcrunch.com/2010/10/21/ning-gets-its-groupon-on/ ) is an example how local services could be used to "infect" all other lifestyle apps and services. And in addition to distributing local services around, Groupon is also focusing on personalization (meaning relevance). Very smart in my opinion. Something that all local services, including mobile and hyperlocal should pay attention to.

Source: Psiaki Last week at CTIA, I moderated a panel on location-based advertising - it was a pleasure to have a conversation with Fred Boos of Rocketbux, Anne Bezancon of Placecast, Dan Gilmartin of Where, Rip Gerber of Loc-Aid and Lisa Petersen of Neustar. The panel got me thinking about ...

Depending on tier, volume, accuracy (GPS or cell), carrier, recency etc. it can go as low as below half a penny but around penny is more likely. Also, real-time network lookup (what is known as Control Plane) tends to be slow and you can't practically use it for real time display advertising; SMS with double opt in is obviously more applicable. I think tnat this approach today doesn't scale beyond individual marketing SMS campaigns and, what is more important, doesn't scale beyond big brands. So you are pretty much looking at individual marketing SMS campaign for a large brand (eg. Starbucks,
Dunkin Donuts etc.). While that is a valid model it is worth noting that large (actually the largest) portion of location services will revolve around small businesses (restaurants, spas etc.) and there is going to be a huge war to win local merchants (it has started already with Google Places, Facebook Places, Groupon, Yelp,
Foursquare, Where...). Network dip economy does not work there.
Network dip approach, while valid for some type of services, is not of lifestyle scale.
Background location on device in my view is tough at least from distribution perspective as it still needs binary distributed on consumer phones which obviously is a big issue.
You just can't make 20 million users to download and install your
binary. Also, managing background location across various device APIs has its challenges. Mostly people think of iPhone here
focusing less on other smartphones. Also, it doesn't work for feature phones which are still making the largest audience. It is going to be a while before we see a widely (tens of millions)
distributed location service that revolves around background location and (monetized) notifications.
So, one reality, at least for us in WHERE is to focus on a model where you have to "infect" other non-LBS apps with location services to extend their usage. We process about 100 million location requests per day from within non-LBS apps. In many cases we are able to extract location out of http request header (so it works even with feature phones) and in large number of cases we instruct non-LBS apps on how to pass location to us so we could deliver location services back to them and monetize in turn. The ultimate goal though would be to permanently embed highly monetizable location services into these apps and make them permanent part of any lifestyle application (stay tuned on this one).
Nevertheless, whichever method you use to obtain large amount of location data you will find out that relevancy is going to become your number one problem, not location really. Persistent locationing assumes that you will be able to deliver personalized (upper case p) location services to user constantly scanning for offers and places around user that particular user may like. Obtaining location is just a small part of all this and should be solved quickly so one could move onto solving the relevancy problem.
Personalization and taste profile is much larger issue with LBS especially when you deal with millions of users and millions of location impressions and places daily. I am sure that you noticed that Foursquare announced personal local recommendations as the top feature for their upcoming release. They are definitely on the right track here. It is going to be about connecting local
merchants to relevant audience. Foursuare is clearly thinking about relevance and especially how to pass that location and place relevance to other applications outside of Foursquare. I think that it is the right thing to focus on. Location on the other hand is always going to be there somehow.

Source: Psiaki Last week at CTIA, I moderated a panel on location-based advertising - it was a pleasure to have a conversation with Fred Boos of Rocketbux, Anne Bezancon of Placecast, Dan Gilmartin of Where, Rip Gerber of Loc-Aid and Lisa Petersen of Neustar. The panel got me thinking about ...

Great post Dev, opens very important questions so it warrants a long comment.
It is true that people spend only small percentage of their mobile time using location based apps. So the problem is how to extend the time that users spend in contact with location based services so that location based startups would have more opportunities to deliver their services and offers to users (and actually make more money in the process).
Your thinking about continuous location awareness (persistent locationing) delivered in combination of background location, network based location and geofencing is a valid approach that relies on technology to become a reality - background location with dynamic geofencing around person (lot of patents have been granted in dynamic geofencing area, it is a bit scary to become successful by using this technology), notifications, integration with network based APIs, SMS gateways etc. Well, while the concept is valid it is however very technically complex - too many integration points, various device APIs, still you have to distribute binaries to phones in most cases, only supported in smartphones and if not it then becomes very expensive to scale beyond individual campaigns because of costs of network location dips and SMS. Where background location is used nativly on the device it affects usability through battery life and also unlikely to scale any time soon.
Moreover, delivering notifications out of the context without understanding whether user is in the appropriate situation to engage with her mobile phone at all makes this approach questionable - while you can have continuous locationing, user may just be annoyed by often notifications and actually not even ready to use her mobile phone at the moment of notification. That pretty much limits the number of notifications you can send to user throughout the day/week to avoid spamming.
It is extremly important to deliver location based services at the moment when user is actually using the phone as those are the best moments when user's full attention could be captured and location based offer "sold" to user.
So, how about turning this on the head a bit by not thinking about this as a technical problem to be solved by technology but rather looking at behavior and usage? While mobile users (not only smartphone users) spend small percentage of their time in location based apps they do obviously spend the rest of their mobile time in other, non-location based apps. So why not extend the "location time" by delivering location based services and offers while user is using those other apps? E.g. lot of users spend their time in music applications like Pandora so why not delivering relevant location based services and offers directly in Pandora? If you could reach large number of users across all kinds of apps at the moment when they are engaged with their mobile phones and use that opportunity to deliver relevant location based services (relevance is the key here, location being one part of it by default) then you really solved a big part of the original problem. The time that users spends receiving relevant location based offers and services is thus greatly extended out of their mothership consumer apps.
That is exactly the concept and approach that WHERE uses with WHEREAds (disclaimer here, I am CTO at WHERE). Via WHEREAds WHERE has delivered location based offers to 50 million users across 170 (and growing) applications, majority of them non-local and many of those apps users use for long periods of time (e.g. Pandora is one of the apps where we extend the reach of our location based services). So the time that users spend receiving location based services has been greatly extended without complex technology. Well, there is complex technology involved but of different nature and is more focused around solving the relevancy problem instead of solving complex technical integrations required by geofencing and constant location tracking.
So the two key issues here for location services to solve to be succesful and used for long periods of time - reach and relevancy. With reach you basically solve the large part of the original problem enabling location based services to extend beyond original location based apps - of course you have to find a way to get location of user in these other apps. With relevancy you make sure that users still treat your location services as services and not as spam. Relevance is fun problem to solve and it depends on Big Data. Capturing and processing Big Data is operationally complex but the answers you get out of the large amounts of data are crucial for relevancy.
We actually got 3 billion location points in a month without using background location and constant location tracking & polling at all! How's that for saving battery life and trees ;)
By having wide reach to users in non-location based apps (basically apps of all kind of categories) we in WHERE are able to calculate location taste graphs for users or what we call here calculate "Lifestyle Genome" for user making sure that we can segment users in such way to be able to deliver relevant location services outside of location based app. Once you solve relevance you actually solved what you call persistent search (we like to call it discovery) as persistent search is all about relevancy (what is relevant to me in this area at this moment).
Once you have relevant audience and in numbers (reach), audience that is using the phone at the moment when the location offer is delivered then you are able to introduce cool new loction services that have not been delivered before. How about flash mob local coupons? Restaurants being able to create Groupon like offers and push them to users of all apps in real time in certain geographic area? Isn't that exactly what geofencing approach would try to deliver anyway? Another disclaimer, WHERE has recently acquired daily deal company Local Ginger.

Source: Psiaki Last week at CTIA, I moderated a panel on location-based advertising - it was a pleasure to have a conversation with Fred Boos of Rocketbux, Anne Bezancon of Placecast, Dan Gilmartin of Where, Rip Gerber of Loc-Aid and Lisa Petersen of Neustar. The panel got me thinking about ...